as the Borrower,
as Administrative Agent, Swing Line Lender and
as Swing Line Lender, L/C Issuer and Syndication Agent,
as Documentation Agent,
and
CAPITAL ONE, NATIONAL ASSOCIATION,
as Joint Lead Arrangers and Joint Book Managers
Page | ||||||
1.01 | ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1 | |||||
1.01 | Defined Terms | 1 | ||||
1.02 | Other Interpretive Provisions | 27 | ||||
1.03 | Accounting Terms | 28 | ||||
1.04 | Rounding | 29 | ||||
1.05 | Times of Day | 29 | ||||
1.06 | Letter of Credit Amounts | 29 | ||||
1.07 | Currency Equivalents Generally | 29 |
THE COMMITMENTS AND CREDIT EXTENSIONS
30
2.01 | The Loans | 30 | ||||
2.02 | Borrowings, Conversions and Continuations of Loans | 30 | ||||
2.03 | Letters of Credit | 31 | ||||
2.04 | Swing Line Loans | 39 | ||||
2.05 | Prepayments | 42 | ||||
2.06 | Termination or Reduction of Commitments | 43 | ||||
2.07 | Repayment of Revolving Credit Loans | 43 | ||||
2.08 | Interest | 43 | ||||
2.09 | Fees | 44 | ||||
2.10 | Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate | 45 | ||||
2.11 | Evidence of Debt | 45 | ||||
2.12 | Payments Generally; Administrative Agent’s Clawback | 46 | ||||
2.13 | Sharing of Payments by Lenders | 48 | ||||
2.14 | Increase in Commitments | 49 | ||||
2.15 | Cash Collateral | 50 | ||||
2.16 | Defaulting Lenders | 51 |
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(continued)
Page | ||||||
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 53 | ||||||
3.01 | Taxes | 53 | ||||
3.02 | Illegality | 56 | ||||
3.03 | Inability to Determine Rates | 57 | ||||
3.04 | Increased Costs; Reserves on Eurodollar Rate Loans | 57 | ||||
3.05 | Compensation for Losses | 59 | ||||
3.06 | Mitigation Obligations; Replacement of Lenders | 59 | ||||
3.07 | Survival | 60 |
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
60
4.01 | Conditions of Initial Credit Extension | 60 | ||||
4.02 | Conditions to all Credit Extensions | 63 |
REPRESENTATIONS AND WARRANTIES
64
5.01 | Existence, Qualification and Power | 64 | ||||
5.02 | Authorization; No Contravention | 64 | ||||
5.03 | Governmental Authorization; Other Consents | 65 | ||||
5.04 | Binding Effect | 65 | ||||
5.05 | Financial Statements; No Material Adverse Effect | 65 | ||||
5.06 | Litigation | 66 | ||||
5.07 | No Default | 66 | ||||
5.08 | Ownership of Property; Liens; Investments | 66 | ||||
5.09 | Environmental Compliance | 66 | ||||
5.10 | Insurance | 67 | ||||
5.11 | Taxes | 67 | ||||
5.12 | ERISA Compliance | 67 | ||||
5.13 | Subsidiaries; Equity Interests; Loan Parties | 68 | ||||
5.14 | Margin Regulations; Investment Company Act | 68 | ||||
5.15 | Disclosure | 69 | ||||
5.16 | Compliance with Laws | 69 |
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(continued)
Page | ||||||
5.17 | Intellectual Property; Licenses, Etc. | 69 | ||||
5.18 | Solvency | 69 | ||||
5.19 | Casualty, Etc. | 69 | ||||
5.20 | Labor Matters | 70 | ||||
5.21 | Collateral Documents | 70 |
AFFIRMATIVE COVENANTS
70
6.01 | Financial Statements | 70 | ||||
6.02 | Certificates; Other Information | 71 | ||||
6.03 | Notices | 73 | ||||
6.04 | Payment of Obligations | 74 | ||||
6.05 | Preservation of Existence, Etc. | 74 | ||||
6.06 | Maintenance of Properties | 74 | ||||
6.07 | Maintenance of Insurance | 74 | ||||
6.08 | Compliance with Laws | 75 | ||||
6.09 | Books and Records | 75 | ||||
6.10 | Inspection Rights | 75 | ||||
6.11 | Use of Proceeds | 75 | ||||
6.12 | Covenant to Guarantee Obligations and Give Security | 75 | ||||
6.13 | Compliance with Environmental Laws | 78 | ||||
6.14 | Preparation of Environmental Reports | 78 | ||||
6.15 | Further Assurances | 79 | ||||
6.16 | Compliance with Terms of Leaseholds | 79 | ||||
6.17 | Material Contracts | 79 | ||||
6.18 | Post-Closing | 79 |
NEGATIVE COVENANTS
80
7.01 | Liens | 80 | ||||
7.02 | Indebtedness | 82 |
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(continued)
Page | ||||||
7.03 | Investments | 84 | ||||
7.04 | Fundamental Changes | 85 | ||||
7.05 | Dispositions | 85 | ||||
7.06 | Restricted Payments | 86 | ||||
7.07 | Change in Nature of Business | 87 | ||||
7.08 | Transactions with Affiliates | 87 | ||||
7.09 | Burdensome Agreements | 88 | ||||
7.10 | Use of Proceeds | 88 | ||||
7.11 | Financial Covenants | 88 | ||||
7.12 | Capital Expenditures | 88 | ||||
7.13 | Amendments of Organization Documents | 89 | ||||
7.14 | Accounting Changes | 89 | ||||
7.15 | Prepayments, Etc. | 89 | ||||
7.16 | Amendment, Etc. | 89 |
EVENTS OF DEFAULT AND REMEDIES
90
8.01 | Events of Default | 90 | ||||
8.02 | Remedies upon Event of Default | 92 | ||||
8.03 | Application of Funds | 92 |
ADMINISTRATIVE AGENT
94
9.01 | Appointment and Authority | 94 | ||||
9.02 | Rights as a Lender | 94 | ||||
9.03 | Exculpatory Provisions | 94 | ||||
9.04 | Reliance by Administrative Agent | 95 | ||||
9.05 | Delegation of Duties | 96 | ||||
9.06 | Resignation of Administrative Agent | 96 | ||||
9.07 | Non-Reliance on Administrative Agent and Other Lenders | 97 | ||||
9.08 | No Other Duties, Etc. | 97 |
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(continued)
Page | ||||||
9.09 | Administrative Agent May File Proofs of Claim | 97 | ||||
9.10 | Collateral and Guaranty Matters | 98 | ||||
9.11 | Secured Cash Management Agreements and Secured Hedge Agreements | 98 |
MISCELLANEOUS
99
10.01 | Amendments, Etc. | 99 | ||||
10.02 | Notices; Effectiveness; Electronic Communications | 100 | ||||
10.03 | No Waiver; Cumulative Remedies; Enforcement | 102 | ||||
10.04 | Expenses; Indemnity; Damage Waiver | 103 | ||||
10.05 | Payments Set Aside | 105 | ||||
10.06 | Successors and Assigns | 105 | ||||
10.07 | Treatment of Certain Information; Confidentiality | 110 | ||||
10.08 | Right of Setoff | 110 | ||||
10.09 | Interest Rate Limitation | 111 | ||||
10.10 | Counterparts; Integration; Effectiveness | 111 | ||||
10.11 | Survival of Representations and Warranties | 112 | ||||
10.12 | Severability | 112 | ||||
10.13 | Replacement of Lenders | 112 | ||||
10.14 | Governing Law; Jurisdiction; Etc. | 113 | ||||
10.15 | Waiver of Jury Trial | 114 | ||||
10.16 | No Advisory or Fiduciary Responsibility | 114 | ||||
10.17 | Electronic Execution of Assignments and Certain Other Documents | 114 | ||||
10.18 | USA PATRIOT Act | 115 | ||||
10.19 | ENTIRE AGREEMENT | 115 |
-v-
1.01 | Commitments and Applicable Percentages | |
1.01(a) | Existing Letters of Credit | |
5.13 | Subsidiaries and Other Equity Investments; Loan Parties | |
6.12 | Guarantors | |
7.01 | Existing Liens | |
7.02 | Existing Indebtedness | |
7.03 | Investments | |
7.09 | Burdensome Agreements | |
10.02 | Administrative Agent’s Office, Certain Addresses for Notices |
Form of | ||
A | Revolving Credit Loan Notice | |
B | Swing Line Loan Notice | |
C | Note | |
D | Compliance Certificate | |
E-1 | Assignment and Assumption | |
E-2 | Administrative Questionnaire |
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DEFINITIONS AND ACCOUNTING TERMS
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Applicable Rate | ||||||
Consolidated | Eurodollar Rate | |||||
Pricing Level | Leverage Ratio | (Letters of Credit) | Base Rate | |||
1 | < 1.50x | 2.50% | 1.50% | |||
2 | ³ 1.50x but < 2.50x | 2.75% | 1.75% | |||
3 | ³ 2.50x but < 3.50x | 3.00% | 2.00% | |||
4 | ³ 3.50x | 3.25% | 2.25% |
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THE COMMITMENTS AND CREDIT EXTENSIONS
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TAXES, YIELD PROTECTION AND ILLEGALITY
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CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
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REPRESENTATIONS AND WARRANTIES
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AFFIRMATIVE COVENANTS
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(i) | Location — Levelland, TX Landlord — Tony Malouf Address: 2045 W State Rd #300, Levelland, TX 79336, Hockley County, TX; | ||
(ii) | Location — Midland Rigs, TX Landlord — EDDR Joint Venture Address: 2700 E I-20, Midland, TX 79706, Midland County, TX; | ||
(iii) | Location — Alice, TX Landlord — A & A Enterprises, LLC Address: 6089 E Hwy 44, Alice, TX 78332, Jim Wells County, TX; | ||
(iv) | Location — Katy, TX Landlord — CG 7600 LP Address: 27520 Katy Brookshire Hwy, Katy, TX 77418, Waller County, TX; and | ||
(v) | Location — Midland Drilling Yard, TX Landlord — Sledge Ranches, Ltd. Address: 1602 S Midkiff, Midland, TX 79701, Midland County, TX. |
NEGATIVE COVENANTS
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Maximum | ||
Consolidated | ||
Four Fiscal Quarters Ending | Leverage Ratio | |
Closing Date through March 31, 2011 | 4.25:1.00 | |
June 30, 2011 and each fiscal quarter thereafter | 4.00:1.00 |
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Fiscal Year | Amount | |
2011 | $110,000,000 | |
2012 | $120,000,000 | |
2013 | $120,000,000 | |
2014 | $120,000,000 | |
2015 | $120,000,000 |
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EVENTS OF DEFAULT AND REMEDIES
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ADMINISTRATIVE AGENT
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MISCELLANEOUS
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BASIC ENERGY SERVICES, INC. | ||||
By: | /s/ Kenneth V. Huseman | |||
Kenneth V. Huseman | ||||
President and Chief Executive Officer |
BANK OF AMERICA, N.A., as Administrative Agent | ||||
By: | /s/ Alan Tapley | |||
Name: | Alan Tapley | |||
Title: | Assistant Vice President |
BANK OF AMERICA, N.A., as a Lender, L/C Issuer and a Swing Line Lender | ||||
By: | /s/ David A Batson | |||
David A. Batson | ||||
Senior Vice President |
CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender, L/C Issuer and a Swing Line Lender | ||||
By: | /s/ Bobby Hamilton | |||
Bobby Hamilton | ||||
Assistant Vice President |
WELLS FARGO BANK, NATIONAL ASSOCIATION | ||||
By: | /s/ Donald W. Herrick, Jr. | |||
Name: | Donald W. Herrick, Jr. | |||
Title: | Director |
AMEGY BANK, N.A. | ||||
By: | /s/ G. Scott Collins | |||
Name: | G. Scott Collins | |||
Title: | Vice President |
COMERICA BANK | ||||
By: | /s/ Gary Culbertson | |||
Name: | Gary Culbertson | |||
Title: | Vice President |
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BASIC ENERGY SERVICES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
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Bank of America, N.A., as Administrative Agent
BASIC ENERGY SERVICES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
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BASIC ENERGY SERVICES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
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Amount of | Outstanding | |||||||||||
End of | Principal or | Principal | ||||||||||
Type of | Amount of | Interest | Interest Paid | Balance This | Notation | |||||||
Date | Loan Made | Loan Made | Period | This Date | Date | Made By | ||||||
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1 | This certificate should be from the chief executive officer, chief financial officer, treasurer or controller of the Borrower. |
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BASIC ENERGY SERVICES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
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to the Compliance Certificate
($ in 000’s)
I. | Section 7.11 (a) — Consolidated Interest Coverage Ratio. | |||||||
A. Consolidated EBITDA for Measurement Period ending on above date (“Subject Period”) as perSchedule 2: | $ | |||||||
B. Consolidated Interest Charges for Subject Period: | $ | |||||||
C. Consolidated Interest Coverage Ratio (Line I.A.¸ Line I.B): | to 1 | |||||||
Minimum required: | 2.50 to 1 | |||||||
II. | Section 7.11 (b) — Consolidated Leverage Ratio. | |||||||
A. Consolidated Funded Indebtedness at Statement Date | $ | |||||||
B. Consolidated EBITDA for Subject Period (Line I.A. above): | $ | |||||||
C. Consolidated Leverage Ratio (Line II.A¸ Line II.B): | to 1 | |||||||
Maximum permitted: |
Maximum Consolidated | ||||
Four Fiscal Quarters Ending | Leverage Ratio | |||
Closing Date through March 31, 2011 | 4.25 to 1 | |||
June 30, 2011 and each fiscal quarter thereafter | 4.00 to 1 |
III. | Section 7.11(c) — Consolidated Senior Secured Leverage Ratio | |||||||
�� | ||||||||
A. Consolidated Senior Secured Indebtedness at Statement Date: | $ | |||||||
B. Consolidated EBITDA for Subject Period (Line I.A. above): | $ | |||||||
C. Consolidated Senior Secured Leverage Ratio (Line III.A¸ Line III.B): | $ | |||||||
Maximum permitted: | 2.00 to 1 |
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IV. | Section 7.12 — Capital Expenditures. | |||||||
A. Capital Expenditures made during fiscal year to date: | $ | _________ | ||||||
B. Maximum permitted Capital Expenditures for such fiscal year: | ||||||||
1. 2011 | $ | 110,000,000 | ||||||
2. 2012 | $ | 120,000,000 | ||||||
3. 2013 | $ | 120,000,000 | ||||||
4. 2014 | $ | 120,000,000 | ||||||
5. 2015 | $ | 120,000,000 | ||||||
C. Amount rolled over from prior year2: | $ | _________ | ||||||
D. Amount pulled back from succeeding year3 | ||||||||
E. Amount pulled back from such fiscal year to preceding year | $ | _________ | ||||||
F. Excess (deficit) for covenant compliance ((Line IV.B + IV.C + IV.D — IV.E.) — IV.A.): | $ | _________ | ||||||
2 | CapEx Rollover Amount cannot exceed 50% of unused amount from prior year. | |
3 | CapEx Pull-Forward Amount cannot exceed $20,000,000. |
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to the Compliance Certificate
($ in 000’s)
(in accordance with the definition of Consolidated EBITDA
as set forth in the Agreement)
Twelve | ||||||||||||||||||||
Consolidated | Quarter | Quarter | Quarter | Quarter | Months | |||||||||||||||
EBITDA | Ended | Ended | Ended | Ended | Ended | |||||||||||||||
Consolidated Net Income | ||||||||||||||||||||
+ Consolidated Interest Charges | ||||||||||||||||||||
+ income taxes | ||||||||||||||||||||
+ depreciation expense | ||||||||||||||||||||
+ amortization expense | ||||||||||||||||||||
+ non-cash expenses | ||||||||||||||||||||
+ non-cash stock-based compensation expenses | ||||||||||||||||||||
+ costs of refinancing Existing Senior Secured Notes | ||||||||||||||||||||
+ Amount expensed in connection with tender for / redemption of Existing Senior Secured Notes | ||||||||||||||||||||
- income tax credits | ||||||||||||||||||||
- non-cash income | ||||||||||||||||||||
= Consolidated EBITDA |
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4 | For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language. | |
5 | For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language. | |
6 | Select as appropriate. | |
7 | Include bracketed language if there are either multiple Assignors or multiple Assignees. |
-1-
1. | Assignor[s]: | |||
2. | Assignee[s]: | |||
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]] | ||||
3. | Borrower(s): | |||
4. | Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement | |||
5. | Credit Agreement: Credit Agreement, dated as of February 15, 2011, among Basic Energy Services, Inc., as Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer, and a Swing Line Lender | |||
6. | Assigned Interest: |
Aggregate | Percentage | |||||||||||||||||||||||
Amount of | Amount of | Assigned of | ||||||||||||||||||||||
Facility | Commitment/Loans | Commitment/Loans | Commitment/ | CUSIP | ||||||||||||||||||||
Assignor[s]8 | Assignee[s]9 | Assigned | for all Lenders10 | Assigned | Loans11 | Number | ||||||||||||||||||
$ | $ | % | ||||||||||||||||||||||
$ | $ | % | ||||||||||||||||||||||
$ | $ | % | ||||||||||||||||||||||
ASSIGNOR [NAME OF ASSIGNOR] | ||||
By: | ||||
Title: | ||||
8 | List each Assignor, as appropriate. | |
9 | List each Assignee, as appropriate. | |
10 | Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. | |
11 | Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. | |
12 | To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. |
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ASSIGNEE [NAME OF ASSIGNEE] | ||||
By: | ||||
Title: | ||||
By: | ||||
Title: | ||||
By: | ||||
Title: | ||||
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CONFIDENTIAL
Please cc:michelle.diggs@baml.com
I. Borrower Name: | Basic Energy Services, Inc $175 Million Revolving Credit Facility |
• | Signing Credit Agreement | o YES | o NO | |||||
• | Coming in via Assignment | o YES | o NO |
III. Type of Lender: | ||
IV. Domestic Address: | V. Eurodollar Address: | |
Syndicate level information (which may contain material non-public information about the Borrower and its related parties or their respective securities will be made available to the Credit Contact(s). The Credit Contacts identified must be able to receive such information in accordance with his/her institution’s compliance procedures and applicable laws, including Federal and State securities laws.
Primary | Secondary | |||||
Credit Contact | Operations Contact | Operations Contact | ||||
Name: | ||||||
Title: | ||||||
Address: | ||||||
Telephone: | ||||||
Facsimile: | ||||||
E Mail Address: | ||||||
IntraLinks E Mail Address: | ||||||
![(BANK OF AMERICA LOGO)](https://capedge.com/proxy/8-K/0000950123-11-015756/h79691h7969101.gif)
1
CONFIDENTIAL
Letter of Credit | Draft Documentation | |||||
Contact | Contact | Legal Counsel | ||||
Name: | ||||||
Title: | ||||||
Address: | ||||||
Telephone: | ||||||
Facsimile: | ||||||
E Mail Address: | ||||||
Pay to: | ||||
Pay to: | ||||
![(BANK OF AMERICA LOGO)](https://capedge.com/proxy/8-K/0000950123-11-015756/h79691h7969101.gif)
2
CONFIDENTIAL
Lender Taxpayer Identification Number (TIN): | ___ ___-___ ___ ___ ___ ___ ___ |
W-9 | ||
W-8BEN | ||
W-8ECI | ||
W-8EXP | ||
W-8IMY |
Tax Contact | ||||
Name: | ||||
Title: | ||||
Address: | ||||
Telephone: | ||||
Facsimile: | ||||
E Mail Address: | ||||
![(BANK OF AMERICA LOGO)](https://capedge.com/proxy/8-K/0000950123-11-015756/h79691h7969101.gif)
3
CONFIDENTIAL
* Additional guidance and instructions as to where to submit this documentation can be found at this link: |
![(BANK OF AMERICA LOGO)](https://capedge.com/proxy/8-K/0000950123-11-015756/h79691h7969102.gif)
ABA# 026009593
Bank of America New York, NY
Account # 1292000883
Account Name: Credit Services
Ref: Basic Energy
![(BANK OF AMERICA LOGO)](https://capedge.com/proxy/8-K/0000950123-11-015756/h79691h7969101.gif)
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